S&P warns of ‘moral hazards’ in tapping contingency reserve account

S&P Global Ratings has cautioned that the government’s decision to access the paper profits on SA’s gold and foreign exchange reserves could fuel inflation and put the Reserve Bank’s independence at risk unless the money is carefully managed and subject to strict rules.

The ratings agency also warned that tapping the profits could encourage “moral hazard” or lead to spending increases that could be hard for the government to reduce...

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